In 1994 (I remember the date because there was some collection with an article somewhere), the author of these lines had an idea: the state could be viewed as a market. At the time, it was an answer to the question “why don’t reforms work.” Because every little bureaucrat at his workplace works exclusively for himself and his boss. That is, he is not an opponent of reforms (although such people do exist), not a corrupt official (although such people can sometimes be found here and there)—he simply honestly does his job at his workplace. Aha! And there are no reforms. As there never were.
What mattered most here was the moment of understanding that the “invisible hand” operates in this system exactly as it does on the ordinary market. That is, without any prior conspiracy, the natural course of events, guided by people pursuing their own interests, leads to results that no one individually intended and that can be interpreted as “beneficial to the system as a whole.”
Later, when I became acquainted with Mises’s praxeology, everything fell into place and it became clear that the state has only one sustainable tendency—inexorable expansion at the expense of civil society. However, it is interesting that a model treating the state as a market apparently still does not exist. Anthony Yassai examines the state as a firm maximizing profit, but this is a somewhat different approach.
I am writing all this for the following reason. Understanding these regularities allows one to evaluate various events, see their long-term consequences, and better understand what is happening right now. Knowing the patterns and features of a particular market’s functioning, it is not so difficult to predict its behavior. This applies fully to the state as well, and it allows us to speak of it as a whole, predict its reactions and “intentions,” of course within certain limits. Moreover, if we understand that to achieve goals people always use the means most accessible to them, then the aggregate result that participants arrive at without wanting to also becomes predictable. A classic example is totalitarianism. Totalitarian ideologies do not set the goal of enslaving people. On the contrary, they all claim they pursue the goal of making people happy. However, as a result, it always turns out that half the country is in prison and the other half is occupied with not ending up there. One of the reasons is that all totalitarian ideologies level out the value of property and people’s lives, that is, they make them more accessible to bureaucrats than in other regimes. Accordingly, people immediately begin to be massively put to use by good people and fine family men who are simply doing their job.
However, let us return to our state-markets. For example, states have been using one and the same method for quite some time to advertise themselves and their services for “solving problems.” This method consists of finding and even creating these problems. For instance, the fight against homosexuality in Russia and here, and the fight for privileges for homosexuals in the West—are essentially the same thing, the same process caused by the same reasons. In reality, to the state as a “system as a whole,” it does not matter what or whom to fight. The main thing is to fight, to have a front of work and justification for its own existence. The specific content of the “struggle” in a specific country is determined by “capturing the mood.” One can also cite the classic example of the “war on drugs,” since it also has that very “unintended consequence” that pleases no one, including—attention!—the politicians and officials themselves.
The second method, closely connected to the first, is emergency rule. The state is always interested in states of emergency and emergency situations. They allow “under the cover of noise” to pass a mass of useful (for the state) decisions. For instance, the First World War, when the USA, which barely participated in the war, nevertheless managed to nationalize the railroads and introduce military conscription. And the Great Depression? That was simply a celebration! All the more so because the right person—Roosevelt—found himself in the right place at the right time. As a result, Americans enjoyed the depression for 12 years, since during this entire time the state was sowing chaos and destruction (the previous economic crisis of 1920 ended within a year). But the state during that time finished off the remnants of capitalism and created a huge foundation for itself for the future.
Emergency rule produces yet another most important result. For example, Ukrainians have now been living for 20 years practically in a state of emergency. They firmly believe that “Україна гине” [Ukraine is dying] and that right now is the fateful moment when everything is being decided (it would be interesting to calculate how many times during all this time the press mentioned the Italian stinking river Rubicon and asked the question quo vadis). This allows achieving a magnificent result—practically completely abandoning any long-term and systemic solutions. “All of this is very correct, but now is not the time!"—I heard this for all 15 years I was involved in politics. And I think I am not the only one. Constant hysterical flailing between short-term and mutually exclusive solutions is, perhaps, the desired ideal toward which any state strives and which our state has long achieved. Well, those who believed that a solution was possible, those who managed to push through some systemic projects, always “suddenly” (but, for some reason, with amazing consistency) encountered that it was precisely their budget that was cut, their staff reduced, their programs liquidated. Understanding that the state is also a market structure of its own (highly specific) kind, at the very least, frees us both from surprise and disappointment in such situations, as well as from those unnecessary efforts themselves.
In the state, even an analog of such a complex phenomenon as capital operates. For example, the same bad man Roosevelt, using the Trading with the Enemy Act of 1917, banned gold. Much earlier the dollar became the only legal means of payment. As a result of these two decisions, Americans found themselves completely defenseless before a state that could now do anything it wanted with the dollar (and, accordingly, with Americans). Of course, neither the authors of the 1917 law nor the judges thanks to whom the dollar became “legal tender” in the 19th century intended such consequences at all. But capital works precisely this way—the capitalist finds a way to combine previous decisions, achievements, and resources and obtains the result he needs. Again, defenselessness before the state was not Roosevelt’s immediate goal; he was pursuing his local goals of good reporting on fighting the depression. But the behavior of “the system as a whole” is precisely the aggregate of what seems to us to be side effects, as in the case of the classical “invisible hand.”
And finally. The state, like any other office, is entirely dependent on consumers. Though, unlike the ordinary market, here the consumer does not buy anything himself, although he pays in full for everything and even more. If the consumer bought state services like pies, there would be no problem at all and I would not be writing any of what I have been writing for the past several years. But, alas, such is not the case. The connection between the state and its consumer is telepathic-mystical—this is a connection of wants, fantasies, miasmas, and marasms, realized through pressure groups, public opinion, and the senseless and merciless (but free and equal for all) voting in elections. With all this, the state is very sensitive, like a truly market agent, catching the slightest changes in consumer moods, but—again, attention!—it catches only wants, since none of the consumers directly pays for the result.
If you understand this, then what is happening right now in our country will not be a secret to you. Where does this marasmic “pokrashchennia” come from that falls on our heads almost every day? Everything is very simple. This is a direct response to consumer demands, filtered through the interests of the state. After the previous model of “society of equal corruption opportunities” collapsed—when the state and the population were busily engaged in robbery and did not interfere in each other’s affairs—the state, in search of resources, turned its attention to the population. The population, in turn, turned its attention to the state, saying, “Well, if you are going to do that, we want everything to be according to the law now.” By the way, this began even with “the first Yulia.” Now the process has taken a severe form, but it is still the same process. The state satisfies your request, stamping out laws on the most “topical” issues. And if you don’t like it, then you should understand that a different answer to such requests with such a mechanism is, in principle, impossible.